CHICAGO, Nov. 13, 2017 (GLOBE NEWSWIRE) -- Professional Diversity Network, Inc. (NASDAQ:IPDN) (“PDN” or the “Company”), a global developer and operator of online and in-person networks that provides access to networking, training, educational and employment opportunities for diverse professionals, today announced financial results for its fiscal third quarter ended September 30, 2017.R

During the third quarter ended September 30, 2017, we continued to experience losses as we furthered our efforts to integrate new management and China operations, reduce costs and streamline our business. Total revenues in the third quarter decreased $1,939,000, or 30.5% for the three months ended September 30, 2017, compared to the same prior year period.

Total costs and expenses were $7,133,000 for the third quarter, compared to $7,640,000 for same period in the prior year, a decrease of $507,000 or 6.6%. The decrease is mainly attributable to a $788,000 or 25.7% decrease in sales and marketing expense mostly due to reduction in sales force, a decrease of $87,000 or 11.7% in cost of revenue, and a slight decrease of $13,000 or 1.6% in depreciation and amortization. The decrease in expenses was partially offset by an increase of $226,000 or 7.5% in general and administrative expense, and $155,000 litigation settlement expenses in the third quarter of 2017, of which $146,000 was accrued for the potential back pay related to what is expected to be non-recurring legal expenses.

For the three months ended September 30, 2017, we realized a net loss of approximately $2,489,000, a $1,216,000 increase from the comparable prior year period. This increase in net loss was primarily driven by a decrease of $1,578,000 in NAPW segment revenues from membership fees, related services and product sales period-over-period (attributable to the restricting of NAPW and positioning for its global brand emergence as IAW in 2018), partially offset by a decrease of $788,000 in overall sales and marketing expenses.

During the nine months ended September 30, 2017, we incurred a net loss of $17,666,000, compared to net loss of $3,519,000 for the nine months ended September 30, 2016, an increase of $14,147,000. The increase in net loss was primarily attributable to a decrease of $6,036,000 in NAPW segment revenues from membership fees, related services and product sales period-over-period, along with NAPW segment goodwill impairment charge of $9,920,000, and an increase of $2,395,000 in overall general and administrative expenses, partially offset by a decrease of $2,199,000 in overall sales and marketing expenses.

As of September 30, 2017, we had $2.8 million in cash.

Michael Wang, PDN Chief Executive Officer, stated, "In the third quarter of 2017, we began to sell memberships in China, launched a new Entrepreneurs Club, planned for our premiere event of 2017 in China and took meaningful actions to address the profitability of our US operations.I believe that our third quarter of 2017 was a productive period. Our expansion to China has now taken a firm footing and our initiatives have now been launched in the market. Because of this progress we are closer to achieving our goals of profitability and growth. We believe that the work that we have done since we took control of the company in November 2016 will be demonstrated in the fourth quarter of 2017 and in 2018, beginning with our event on December 2nd, in Beijing.

In China, year to date, the Company successfully launched its Education and Training segment, and held eleven paid events to-date. Those events have provided live marketing research, and the results have helped us to plan and seek to enhance future events. The Company also launched in China its Women’s Networking segment, holding its first marketing event near the end of the second quarter. The Company continues to build the framework for its third new China business, Secondary Education Services. The model involves working on partnerships with educational institutions, the first of which we announced during the second quarter.

Specific restructuring and new business development for the quarter included:

Finalized plans and secured commitments to hold largest education and training event of the year on December 2nd, 2017 in Beijing China, “The International Capital Leadership Summit.” Mr. Bruce Aust, Vice Chairman of the Nasdaq Exchange will be featured at the event where the company hopes to have as many as 5,000 participants

During 2018, the company anticipates soon investing in increasing women’s networking membership sales and expanding from NAPW (National Association of Professional Women), a national organization to IAW (International Association of Women), an international women’s networking organization. The company believes that in a global market place, the IAW organization can offer all the value of today’s NAPW and add an international platform to enhance membership value.”

Professional Diversity Network, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

December 31,

2017

2016

(Unaudited)

Current Assets:

Cash and cash equivalents

$

2,821,729

$

6,068,973

Accounts receivable, net

1,799,013

2,170,529

Incremental direct costs

241,235

423,023

Prepaid expenses and other current assets

490,581

957,140

Total current assets

5,352,558

9,619,665

Property and equipment, net

291,774

277,534

Capitalized technology, net

141,573

173,368

Goodwill

10,280,885

20,201,190

Intangible assets, net

7,035,139

9,183,439

Merchant reserve

780,849

1,426,927

Security deposits

239,059

220,754

Other assets

-

35,000

Total assets

$

24,121,837

$

41,137,877

Current Liabilities:

Accounts payable

$

1,232,510

$

2,172,332

Accrued expenses

1,172,435

962,172

Deferred revenue

4,422,715

5,485,599

Total current liabilities

6,827,660

8,620,103

Deferred tax liability

2,492,837

3,653,274

Deferred rent

60,959

55,718

Other liabilities

78,481

33,159

Total liabilities

9,459,937

12,362,254

Commitments and contingencies

Stockholders' Equity

Common stock, $0.01 par value; 45,000,000 shares authorized; 3,936,399 shares and 3,623,899 shares issued as of September 30, 2017 and December 31, 2016, respectively; and 3,931,838 shares and 3,619,338 shares outstanding as of September 30, 2017 and December 31, 2016, respectively

39,329

36,204

Additional paid in capital

79,783,969

76,234,772

Accumulated other comprehensive loss

(1,435

)

-

Accumulated deficit

(65,122,846

)

(47,458,236

)

Treasury stock, at cost; 1,048 shares at September 30, 2017 and December 31, 2016

The following table provides a reconciliation of Adjusted EBITDA to Net Loss, the most directly comparable GAAP measure reported in our consolidated financial statements:

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

(in thousands)

Net loss

$

(2,488

)

$

(1,273

)

$

(17,665

)

$

(3,519

)

Stock-based compensation expense

146

118

731

218

Goodwill impairment charge

-

-

9,920

-

Litigation Settlement

155

-

155

500

Gain on lease cancellation

-

-

-

(424

)

Depreciation and amortization

807

820

2,444

2,498

Change in fair value of Warrant Liability

-

401

-

401

Interest Expense

-

216

12

217

Interest and other income

(4)

-

(9

)

(1

)

Income tax benefit

(213

)

(624)

(1,160)

(1,218)

Adjusted EBITDA

$

(1,597

)

$

(342

)

$

(5,572

)

$

(1,328

)

About Professional Diversity Network (PDN)

Professional Diversity Network, Inc. (PDN) is a global developer and operator of online and in-person networks that provides access to networking, training, educational and employment opportunities for diverse professionals. We operate subsidiaries in the United States and China including Noble Voice, a career placement and career counseling call center and National Association of Professional Women (NAPW), which is one of the largest, most recognized networking organizations of professional women in the country, spanning more than 200 industries and professions. Through an online platform and our relationship recruitment affinity groups, we provide our employer clients a means to identify and acquire diverse talent and assist them with their efforts to comply with the Equal Employment Opportunity Office of Federal Contract Compliance Program. Our mission is to utilize the collective strength of our affiliate companies, members, partners and unique proprietary platform to be the standard in business diversity recruiting, networking and professional development for women, minorities, veterans, LGBT and disabled persons globally.

Forward-Looking Statements

This press release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. This release does not constitute an offer to sell or a solicitation of offers to buy any securities of any entity. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business, which include the risk factors disclosed in our most recently filed Annual Report on Form 10-K and in our subsequent filings with the Securities and Exchange Commission. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," “plan,” "should," and "would" or similar words. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise. Our most recently filed Annual Report on Form 10-K, together with this press release and the financial information contained herein, are available on our website, www.ipdnusa.com. Please click on "Investor Relations."

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